Comment on Online pledging of stocks for trading F&O

Thanks for putting up this page. I am currently not a client. There seems to be some confusion re: pledging client securities for FO. This NSE circular (specifically, page 2 of the annexure – quoted below) seems not to allow it : “However, Members can lodge their own securities only to the Clearing Corporation and not the clients’ securities.” Pledging client securities for FO does seem like common industry practice which this circular seems to disallow.

Could you confirm if NSE is allowing pledging of securities for FO?

http://www.nseindia.com/content/circulars/INSP20638.zip

Collaterals as Margin
In Equity Derivative Segment and Currency Derivative Segments Members are allowed
to accept approved securities from clients for margin purposes. However, Members can
lodge their own securities only to the Clearing Corporation and not the clients’
securities. Where Member has accepted securities with appropriate hair cut for margin
purpose, but has to deploy his funds for meeting margin requirements of the client at
the Exchange, Members may levy interest or delayed payment charge on debit balance
as per the terms consented by the client.

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